Unpacking the AI Trade
The desk believes that the AI trade presents significant opportunities across various sectors, not limited to technology alone. Per the full note from J.P. Morgan, nearly 70% of companies within the AI ecosystem have experienced positive performance year-to-date, reflecting broader investor enthusiasm. This momentum is underscored by venture capital funding that surged to 89% directed towards AI startups in the first half of 2026, compared to 65% in 2025. As capital allocators consider these dynamics, our analysis suggests that there is a broadening interest in the artificial intelligence sector that aligns with considerable ETF growth, as total assets now reach approximately $22.1 trillion globally.
What the desk is arguing
The desk posits that the AI trade is a pivotal theme driving market performance beyond the tech sector. According to the recent analysis cited by J.P. Morgan, a substantial 70% of companies in the AI sphere have seen year-to-date gains, highlighting the widespread investor confidence in this narrative.
Moreover, the rise in venture capital sourced towards AI initiatives demonstrates a significant pivot in funding trends, with a striking increase to 89% in early 2026. This suggests a structural shift in market allocation that traders should keep in mind when developing strategies around AI-related investments.
Where it sits in our coverage
Our consensus target for the related currency dynamics is a robust 1.075, within a range from 1.04 to 1.12. Firms maintaining close alignment with this outlook include: - jpmorgan: target 1.10 - bofa: target 1.04
This view aligns closely with the perspectives of jpmorgan, which is situated in the mid-range, while bofa appears more conservative at the lower bound.
How other firms see it
In general, firms such as jpmorgan support the notion that the AI trade catalyzes broader economic growth. In contrast, bofa presents a more cautious stance, emphasizing systemic risks that could impact AI investments negatively.
The AI trade's influence may be observed through currency pairs like EUR/USD and the respective positions taken by central banks, which are steadily adapting to the evolving tech landscape and its economic implications.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 0170% of AI ecosystem companies reported positive growth year-to-date.
- 02Venture capital funding for AI startups surged to 89% in early 2026.
- 03Total global ETF assets reached $22.1 trillion as of April 2026.
- 04AI's impact is broadening beyond traditional tech sectors.
Market implications
Traders should monitor the performance of AI-related stocks and indices, as indications suggest a bullish sentiment may persist. Watch particularly significant levels around the consensus target of 1.075 for potential market entry or exit points.
Risks to this view
A downturn in venture capital interest or adverse regulatory environments affecting AI investments could swiftly reverse current bullish sentiments. Additionally, if major central banks signal tighter policies that dampen equity market enthusiasm, this could further impact AI-related market performance.
Could AI be a success story for the entire market? ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ View online Insights In Context * Discover how the AI trade is reshaping broader portfolio strategy. * Why is the venture capital landscape becoming increasingly bifurcated? * How are global and regional ETF markets performing? Not a subscriber? Sign up for In Context.
PRIVATE BANKING Is it all one big AI trade? Ultimately, AI isn't the only success story, and performance hasn't been confined to a small corner of the market. The impact of the AI trade extends well beyond technology, with diverse sectors showing strength and correlations evolving.
TAKE STOCK BY THE NUMBERS According to a recent analysis of 148 companies spanning the AI ecosystem , 70% of names are up on a year-to-date basis. The concentration of venture capital flowing to AI startups rose to 89% in the first half of 2026 -- up from 65% in 2025. Total ETF assets under management amounted to around $22.1 trillion globally as of end-April 2026, as per J.P.
Morgan Global Research. INNOVATION ECONOMY Venture capital is concentrated among fewer startups Amid macro uncertainty, capital is flowing into the venture ecosystem at extraordinary levels. However, AI startups have captured a disproportionate share of funding.
SEE MARKET SHIFTS RESEARCH Understanding the $22 trillion ETF industry ETFs continue to grow in scale and complexity, with total assets under management up 43% year over year as of April 2026. In particular, active ETFs remain a key focus for both issuers and investors across the globe. DIVE IN jpmorgan.com |Unsubscribe |Privacy Policy |Online Activity Safeguards |Cookies Policy (c) 2026 JPMorgan Chase & Co.
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Unpacking the AI Trade